MBA404: Consumer Behaviour and Marketing Psychology of Netflix Report

This report provides a detailed analysis of Netflix's communication mix approaches and market performance, focusing on the application of marketing psychology principles. It examines how Netflix leverages social, demographic, and cultural trends in its marketing strategies, particularly in response to the growing shift towards online streaming. The report explores Netflix's subscription models and their impact on market performance across different regions, including the US and India. It assesses how Netflix addresses consumer attitudes, group influences, and cultural trends in its communication mix, using social media to gather consumer insights. The analysis critically evaluates the alignment between the communication mix and the findings, comparing it to previous assignments, and offers strategic recommendations for enhancing market share, such as focusing on regional content and addressing gender-related preferences in content creation. The report also discusses consumer learning processes, personal buying decisions, and the challenges of adapting to market changes.

Running head: CONSUMER BEHAVIOUR AND MARKETING PSYCHOLOGY
Consumer Behaviour and Marketing Psychology
Name of the Student
Name of the University
Author Note

1CONSUMER BEHAVIOUR AND MARKETING PSYCHOLOGY
Executive Summary
This research report is a detailed analysis of Netflix communication mix approaches and
market performance. The analysis of communication mix approaches indicates that Netflix
focus on multiple social groups of people when it comes to offering its service. Particularly,
in the marketing communication mix approaches, the organization uses social, demographic
and cultural trends. Almost 93% of the global audience in the entertainment sector are
switching to online streaming, which is a significant market opportunity for Netflix. In
addition, the percentage of female users are also increasing, which creates the scope for
creating new contents to access the market.

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Table of Content
1. Concise overview of the product/service and its marketing performance.............................3
2. Company’s current marketing communication mix...............................................................4
3. Critically analysing whether or not the communication mix demonstrates a strong
alignment to the findings............................................................................................................7
4. Three strategic recommendations..........................................................................................9
References................................................................................................................................11

3CONSUMER BEHAVIOUR AND MARKETING PSYCHOLOGY
1. Concise overview of the product/service and its marketing performance
It is noted that chosen service is Netflix Subscription which is one of the most
crucial services ever made in the digital platform. It is observed that Netflix’s subscription
service comes in the form of different subscription plans to meet customer needs and govern
the market performance in the most desired way. To make the offering customer-centre, the
subscription service, there are multiple alternatives for selection from customers’ end. This
means customers’ selection determines the number of devices they can stream on Netflix at
the same time. To stimulate the market performance, subscription service is further facilitated
to give customers more convenient experience. For example, almost 45.12% of world’s total
population are the smartphone users, Netflix came up with the solution of mobile plan
besides, its Basic Plan, Standard Plan and Premium Plan (Teece 2010). Each of the
subscription plan is designed to target various social and economic class of people across its
global market.
Market Performance
When it comes to market performance of Netflix’s subscription service, it can be
mentioned that performance is dependent upon the market, as its performance varies from
market to market due to economic and social factors. For example, in US market Netflix
experienced a worst drop with the loss of 130,000 users, while the Indian market has now
been backbone of emerging success (Jenner 2016). Although, with the increasing number of
smartphones and a surge in the broadband, Indian market has become the most effective
battleground form streaming service, Netflix’s earning in Indian market is twenty times more
money per user than India’s most popular video streaming platform Hotstar (Fernández
Gómez and Martín Quevedo 2018). India which Netflix once considered to be its most vital

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market for revenue is already crowded with several other players like Zee Entertainment,
Hotstar, Amazon Prime, etc. This can be considered as external market threat for Netflix in
the coming days driven by changing consumer behaviour. However, it can be mentioned
that subscription video-on demand model of Netflix has increased the revenue from 1.36
billion to around 15.8 billion within a decade (Goldfayn 2012). Hence, Netflix’s subscribers
have followed a trend of going from less than 22 million in the 2011 to almost 150 million in
2019. Furthermore, Voigt, Buliga and Michl (2017) mentioned that almost 37% of world’s
internet users take Netflix’s subscription plan.
2. Company’s current marketing communication mix
Marketing communication is a vital aspect of service’s overall marketing effort as it
involves sharing of meaning, information and concepts by the source and receiver about the
products and services (Sim 2016). Netflix has applied a broad marketing approach in which it
has made use of socio-economic environment of the market across the globe.
Addressing consumer attitude in communication mix approach
As Netflix’s Subscription plan comes in different plans, the brand targets different
groups of consumer class. Particularly, in an emerging market like India, Netflix’s prime
focus is on the young people. According to Matrix (2014), 31.34% of young adults of world’s
total population use smartphones and thereby, people build the attitude of exploring new
things because access to information is certainly easy now days due to deep penetration of
technology. Likewise, almost 72% of world’s total young population use social media.
Thereby, Netflix finds it easy to communicate its service (statista.com 2020). With the help
of social media tools like Facebook, Twitter, Instagram, YouTube, Netflix seeks to collect
information about the users first such as their likes and dislikes. For example, Netflix has a
complete understanding about the Indian audiences; people in Indian tends to watch English

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series that are based on social problems. Thus, to communicate the service, Netflix uses
popular social media tools like Facebook, Twitter. YouTube and Instagram. The following
figure shows the number of users in social media in developed nation like United States.
Figure 1: Percentage of social media users in US
(Source: statista.com 2020)
Group influence
With the growing penetration of technology and internet, it is easy for businesses to
influence social groups. For example, digital communication has made it easy for people to
interact with people in groups anytime. There are several communication applications and
thereby if one single user finds an item interesting, she/he may share the information to the
group and thereby the rest of people know the information. Netflix leverages the social media
application to promote its services (Abraham 2013). For instance, an adult in the corporate
sector has many friends in social media tool like Facebook, now Netflix calculates how many
people already have liked Netflix’s page or offerings. So, if the match is found, it shows the
number of people liked the offering in the promotional page to that individual. Likewise, the

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targeted individual is constantly shown the items in social media to influence his/her
purchase behaviour.
Culture
Cultural trends are significantly used in Netflix’s promotional activities. For example,
in a developed market like US, millennial hold the belief of liberalism, thereby, to
communicate the service, Netflix promotes its offering based liberalism like Peaky Blinders
(Fernández-Manzano, Neira and Clares-Gavilán 2016). The sneak peak of the series is shown
to all social media tools like Facebook, Instagram and Twitter. Likewise, in an emerging
market like India, millennial tend to show their interest in freedom of choice and to promote
the service Netflix particularly selects one of its offering like Sex Education and promote the
series to all digital media channels.
Social
When it comes to communicating the service using the social trends, Netflix
significantly focuses on the contemporary social trends. For example, in 2018 total
percentage of digital view viewers is 93.5% (Fernández Gómez and Martín Quevedo 2018).
This means people who once used to go watch movies in theatre have shifted the attention to
online streaming. Thus, by leveraging this trend, Netflix promotes the offerings that Indian
audiences once used to watch in theatre. However, Dias, M. and Navarro (2018) argued that
this is a serious threat to Netflix’s marketing approach because the social trends are also
leveraged by Amazon Prime, Zee Entertainment, Hotstar, etc,
Consumer learning process:
In order to make the consumers aware of the services, Netflix picks the current affairs
and events. For example, a big production house released the sequel of the famous horror
movie called Conjuring and so considering this public awareness, Netflix promotes its own

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horror comics and series to social media tools to influence the consumers with the same
category (Jenner 2016).
Personal buying decision-process:
Personal buying process is significantly dependent on the economic trends of the
markets. However, it is difficult to sell the service to young people in Indian market
compared to developed market like US. Constant fluctuation in the Indian economy is a
challenge to digital service and thereby when it comes to making a purchase decision, young
people in India look for a cheaper option if provided by other players. Nonetheless, according
to the survey results in the previous assignment, gender plays a big role in personal buying
process –meaning that percentage of female users in online streaming platform is less
(Goldfayn 2012). Thereby, to promote the service by highlighting the gender equality and
bridge the gender gap, Netflix seeks to produce series that are based on gender-equality.
Promotion of recently released series called ‘Sex Education’ which supports both gender
equality and women empowerment. So, picking these two social variable, Netflix
communicates its service.
3. Critically analysing whether or not the communication mix
demonstrates a strong alignment to the findings
When comparing the findings of the above analysis with the finding of previous
assignments, it is found that findings is little shaky but in some parts findings carry the same
message. For example, in the findings of previous assignment, it was found that word of
mouth has a moderate effect on purchased of subscription. Likewise, the above presented
findings indicates that word of mouth is a significant driver in the purchase decision. The
cultural trends as discussed above, like liberalism has become a broad social trends; which
means people’s choice towards liberal activities are positive and thereby if a group of people

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tends to talk about such streaming, others are most likely to be influenced through Word of
Mouth approach. In addition, the findings also indicate the fact that young people and young
adults are the major target group of people for subscription and promotion, as it was
discussed above that a large percentage of (72%) of young people across the globe are widely
influenced by digital content due to the increasing use of smartphones. This findings is quite
similar to the findings found in the previous assignments. In the previous assignment, it was
found that almost 60% of total population of the survey fall under the age group between 18-
24 years, while 33% belongs to the age group 25-34 years. Therefore, when it comes to
applying the communication mix approaches, Netflix has to focus on social and cultural
trends followed by young people. For example, promotion of the series called “Sex
Education” significantly targets the young people falling under the age group 18 to 24 years.
It can be mentioned that hence, the findings are similar because almost 85% of Netflix’
offerings are based on young people (Wayne 2018).
However, findings of previous studies stated the fact that gender difference is
relatively a big challenge because female audiences are unlikely to choose the subscription
due to the varied preferences. This is related to the contemporary social trends which means
due to importance of being independent and liberal, women across the world prefer contents
that are based on their own preferences –such as offering should include female centric
contents. Nonetheless, most of the online streaming contents are based on mass global trends
that are widely neglecting women’s preferences. Thereby, the percentage of female users are
relatively less in developing nations like but when it comes to communication mix, it is noted
that Netflix sought to promote the streaming that are centred on female’s choices –such as
The handmaid’s tale and Crown. Consequently, according to the data provided by Statista,
almost 75% of female subscribe to online video or music subscription have a Netflix

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subscription (statista.com 2020). Thus, it can be mentioned that there is a complete
discrepancy in the findings in relation to gender.
4. Three strategic recommendations
The above presented findings state the fact that young generation including millennial
across the world are interested in online streaming videos. Moreover, the findings of this
assignment also indicates the fact that percentage of female users in Netflix is steadily
increasing. In addition, the number of rivals such as Amazon Prime, Zee Entertainment and
Hotstar have also crowded the market (Voigt, Buliga and Michl 2017). To increase number
of users and overall market share, the organization needs to apply relevant strategies related
to streaming services.
Focus on the regional content: In order to increase the market share, the
organisation needs to focus on developing content on regional language. For example,
emerging market like India has four big Tier I cities and each has its own regional language.
Entertainment sector in these four Tier I cities are based on social trends of the regions (Sim
2016). So, to acquire the market, Netflix should come up with the content based on regional
trends. For instance, Bengali Entertainment in India has increasingly been gaining importance
from audiences. Thus, the organization needs to focus on developing content that are based
on Bengali Language.
Tying up with internet connection providers: It is certain that all smartphone
devices, TV, laptop and computer are run by internet. So, if an individual has access to
internet, he/she also has the access to online streaming. To leverage this opportunity, the
organisation needs to tie up with the largest internet service provider of the market to sell
subscription. For example, if monthly internet package comes at certain industry price range,
users will be offered with Netflix subscription for a certain period at the additional cost of

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$10 summed up with internet existing package (Wayne 2018). This strategy is most likely to
increase the percentage of users’ subscription on Netflix because through the tie-up, it gains
access to new markets.
Purchase of market’s largest entertainment production house: Buying a
production house would likely to increase the brand value of Netflix. For example, if Netflix
holds share of world’s largest production house like Universal Picture, it boosts up the brand
appearance in the global market because all content of Universal Picture would also be
available on Netflix (Dias and Navarro 2018).

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References
Abraham, S., 2013. Will business model innovation replace strategic analysis?. Strategy &
Leadership.
Dias, M. and Navarro, R., 2018. Is Netflix Dominating Brazil. International Journal of
Business and Management Review, 6(1), pp.19-32.
Fernández Gómez, E. and Martín Quevedo, J., 2018. Connecting with audiences in new
markets: Netflix s Twitter strategy in Spain. Journal of media business studies, 15(2), pp.127-
146.
Fernández-Manzano, E.P., Neira, E. and Clares-Gavilán, J., 2016. Data management in
audiovisual business: Netflix as a case study. El profesional de la información (EPI), 25(4),
pp.568-576.
Goldfayn, A.L., 2012. Evangelist marketing: What apple, Amazon, and netflix understand
about their customers (that your company probably doesn't). BenBella Books.
Jenner, M., 2016. Is this TVIV? On Netflix, TVIII and binge-watching. New media &
society, 18(2), pp.257-273.
Matrix, S., 2014. The Netflix effect: Teens, binge watching, and on-demand digital media
trends. Jeunesse: Young People, Texts, Cultures, 6(1), pp.119-138.
Sim, G., 2016. Individual Disruptors and Economic Gamechangers: Netflix, New Media, and
Neoliberalism. The Netflix Effect: Technology and Entertainment in the 21st Century.
London and New York: Bloomsbury Academic, pp.185-202.